An Act To Modify
Retirement Plans for Fire Investigators and Sergeants

Preliminary Fiscal
Impact Statement for Original Bill

Sponsor: Rep. Harrington of Sanford

Committee: Labor and Housing

Fiscal Note Required: Yes

Preliminary
Fiscal Impact Statement

FY 2019-20

FY 2020-21

ProjectionsFY 2021-22

ProjectionsFY 2022-23

Net Cost
(Savings)

General Fund

$131,521

$6,652

$6,885

$7,126

Appropriations/Allocations

General Fund

$131,521

$6,652

$6,885

$7,126

Other Special Revenue Funds

$981,519

$6,652

$6,885

$7,126

Fiscal Detail
and Notes

This legislation
moves state fire marshal investigators, senior state fire marshal
investigators and state fire marshal sergeant positions for the 1998 Special
Plan to a 20-year, no-age plan.Since
there is no open 20-year, no-age retirement plan at the current time, a new
plan will need to be created.

Creating a new
20-year, no-age retirement plan for certain positions within the State Fire
Marshal's Office will increase the unfunded liability of the Maine Public
Employees Retirement System (MainePERS) by approximately $1.1 million.Pursuant to the Constitution of Maine,
Article IX, Section 18-A, unfunded liabilities may not be created except
those that result from experience losses. An analysis of the positions that
would be eligible for the new plan indicates that approximately 11.4% are
funded with General Fund monies and 88.6% are funded with Other Special
Revenue Funds.Based on these
percentages, the Retirement Allowance Fund within MainePERS will require a
one-time General Fund appropriation of $125,001 and a one-time Other Special
Revenue Funds allocation of $974,999 in fiscal year 2019-20 for the unfunded
liability.The State Fire Marshal's
Office program, Other Special Revenue Account currently has sufficient funds
to cover the one-time cost.

This proposal will
also increase the normal cost component of the employer retirement rate,
resulting in increased employer contributions to the Maine Public Employees
Retirement System for these employees from 5.9% to 10.83% for each year of
the 2020-2021 biennium.The Retirement
allowance fund will require General Fund appropriations of $6,520 and $6,652
in fiscal years 2019-20 and 2020-21, respectively, for the additional
cost.MainePERS is unable to determine
the employer contribution rate for the unfunded actuarial liability at this
time.